Half-year Financial Report

The Law Debenture Corporation p.l.c.

24 July 2026

The Law Debenture Corporation p.l.c. ('Law Debenture' or the 'Company') today published its results for the half-year ended 30 June 2026.

·     Another strong overall performance against its objective of achieving long-term capital growth in real terms and steadily increasing income, with benchmark outperformance over 1, 3, 5 and 10 years.

·     6% increase in first interim dividend; 47 years of increasing or maintaining dividends to shareholders.

·     James Henderson, Joint Portfolio Manager, to retire from Janus Henderson in June 2027; Laura Foll to manage the Portfolio going forward.

Past performance cannot be relied on as a guide to future performance. The value of investments and any income from them can go down as well as up. Your capital is at risk.

Highlights

Strong Longer-Term Record

Dividend

Investment Portfolio

Update on Portfolio Management

IPS

Robert Hingley, Chairman, said:

 "Against an often-turbulent market backdrop, I am pleased with the performance Law Debenture has delivered for shareholders in the first half of 2026. We once again outperformed our benchmark with a share price total return of 16.2%, which exceeded the FTSE All-Share by 9.0%. Our record of long-term total returns and dividend growth remains strong. While Law Debenture is not immune to wider uncertainty, we are resilient by design and confident in our ability to serve shareholders well over the long-term.

The Board would like to thank James for his many years of service as Portfolio Manager of Law Debenture, and for the outstanding contribution he has made during that time, having overseen NAV total return of 1288% since taking over lead management responsibilities in 2003, compared to FTSE All-Share total return of 546% over the same time period. We wish him all the best for the future. Laura's own longstanding tenure, including seven years as Joint Portfolio Manager, reflects her proven and valued expertise and ensures she is well-positioned to continue as lead manager of the Portfolio."

Denis Jackson, Chief Executive Officer, commented:

 "Law Debenture's differentiated structure continues to underpin strong performance and returns for shareholders. In a first half once again disrupted by unexpected geopolitical and macroeconomic events, I am pleased to report that we have delivered another good performance. The consistency of Law Debenture's performance speaks to the resilience and diversification of our business and the strength of our investment approach. Notwithstanding the backdrop of continued market uncertainty, we enter the second half with confidence in our ability to continue creating value for our shareholders.

I would also like to recognise the exceptional contribution that James Henderson has made to Law Debenture. He has played a central role in the success of the Portfolio and leaves an impressive legacy in his retirement. Having worked on the Portfolio for fifteen years, Laura Foll brings deep knowledge of Law Debenture and a proven investment track record. The Board and I have every confidence in her ability to lead the Portfolio with an investment approach that continues to serve shareholders well over the long-term."

Investment Portfolio

Our objective is to achieve long-term capital growth in real terms and steadily increasing income. The aim is to achieve a higher rate of total return than the FTSE All-Share Index Total Return through investing in a diversified Portfolio of stocks.

Independent Professional Services

We are one of the leading providers of independent professional services, built on three excellent foundations: our Pensions, Corporate Trust and Corporate Services businesses. We operate internationally, with offices in the UK, New York, Ireland, Hong Kong, Delaware and the Channel Islands.

Companies, agencies, organisations and individuals throughout the world rely upon Law Debenture to carry out our duties with the independence and professionalism upon which our reputation is built.

¹ NAV is calculated in accordance with the AIC methodology, based on performance data held by Law Debenture including fair value of the IPS business and long-term borrowings. NAV is shown with debt measured at par and with debt measured at fair value and both total returns account for shareholder returns through dividends.

² Source: Refinitiv.

³ Source: Office for National Statistics published RPI for June 2026.

⁴ Calculated based on data held by Law Debenture for the period ended 30 June 2026.

Important information NAV performance is not the same as share price performance and investors may not realise returns in line with NAV performance. Tax assumptions and reliefs depend upon an investor's particular circumstances and may change if those circumstances or the law change. Nothing in this statement is intended to or should be construed as advice. This statement is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. Issued in the UK by The Law Debenture Corporation p.l.c. The Law Debenture Corporation p.l.c. is registered in England and Wales with company number 00030397 and registered address at 8th Floor, 100 Bishopsgate, London, United Kingdom EC2N 4AG. It is authorised and regulated by the Financial Conduct Authority as an internally managed AIF with firm reference number 629081. This statement is directed at and for use only by investors in the United Kingdom.

THE LAW DEBENTURE CORPORATION P.L.C. AND ITS SUBSIDIARIES

HALF YEARLY REPORT FOR THE SIX MONTHS TO 30 JUNE 2026 (UNAUDITED)

Financial Summary

¹ Please refer below for calculation of NAV.

² NAV is calculated in accordance with the AIC methodology, based on performance data held by Law Debenture including the fair value of the IPS business and long-term borrowings.

³ Revenue per share is calculated using the weighted average shares in issue as at 30 June 2026.

⁴ The second interim dividend is not due to be announced until September 2026 and has not been factored in the calculation presented. The Board have indicated their intention to pay three interim dividends of 8.875p in respect of 2026, each representing a quarter of the total 2025 dividend declared of 35.5p. The final dividend will be declared in March 2027.

⁵ Ongoing charges are calculated based on AIC guidance, using the administrative costs of the investment trust and include the Janus Henderson investment management fee, currently charged at an annual rate of 0.30% of the portfolio value. There is no performance related element to the fee.

^* Items marked '*' are alternative performance measures ('APM'). For a description of these measures, see pages 167-170 of the annual report and financial statements for the year ended 31 December 2025.

Half Yearly Management Report

Introduction

I am pleased to report that the Law Debenture Corporation p.l.c. ('Law Debenture') has delivered another good performance in the first half of 2026, with strong absolute returns and continued outperformance against our benchmark.

We have demonstrated once again the strength of our differentiated model. The combination of our well‑diversified investment portfolio and the dependable cash flows from our Independent Professional Services business ('IPS') has enabled Law Debenture to generate a total NAV return of 11.4%, comfortably outperforming our benchmark, the FTSE All-Share Index, and continuing to generate attractive capital growth while supporting our long‑standing dividend record.

The first half of the year has been marked by continued geopolitical and macroeconomic uncertainty, including conflict in Iran and the wider Middle East region, and the associated risk of further disruption to energy markets and global supply chains. In four of the last seven years, the first half has been disrupted by events that could not have been reasonably predicted at the start of the reporting period. Against this backdrop, the consistency of Law Debenture's performance speaks to the resilience of our business and the strength of our investment approach delivered by our Investment Managers.

After 44 years in financial services, James Henderson, our Joint Portfolio Manager, has decided to retire from Janus Henderson in June 2027. Going forward, the Portfolio will be managed by Laura Foll, who has been Joint Portfolio Manager of Law Debenture since 2019 and has worked on the account since 2011. Laura has 17 years of financial industry experience, having joined Janus Henderson in 2009. She will continue to be supported by the full resources of Janus Henderson's Global Equity Income team. James will work closely with the team to ensure a smooth transition of responsibilities. There will be no change to the Company's investment objective or strategy.

The Board would like to thank James for his many years of service as Portfolio Manager of Law Debenture, and for the outstanding contribution he has made during that time, having overseen NAV total return of 1288% since taking over lead management responsibilities in 2003, compared to FTSE All-Share total return of 546% over the same time period. We wish him all the best for the future. Laura's own longstanding tenure, including seven years as Joint Portfolio Manager, reflects her proven and valued expertise and ensures she is well-positioned to continue as lead manager of the Portfolio.

We continue to build on our long-term record of outperformance, the drivers of which are covered in detail in the Investment Managers' report. The Portfolio remains UK-focused but deliberately diversified, to take advantage of valuation opportunities where the Investment Managers see them, while retaining a clear focus on businesses capable of delivering attractive long-term returns.

IPS has delivered another resilient performance and remains on track to achieve underlying growth within our mid-to-high single-digit target range for the full year. This highlights the quality, diversity and cash-generative nature of IPS, which remains an important source of structural growth for the Group.

Dividend

We continue building on our long record of maintaining or increasing dividends, which has extended into its 47th year. The Board has declared a first interim dividend of 8.875 pence per ordinary share, representing a 6.0% increase over the prior year's first interim dividend.

This dividend was paid on 3 July 2026 to shareholders on the register at close of business on 5 June 2026. Based on the closing share price on 23 July 2026 of 1,226 pence, the dividend yield per Law Debenture share is 2.9%¹.

¹ Based on the total dividend paid in relation to 2025 of 35.5p per share.

The consistent increase in dividend, amounting to 119.1%¹ in aggregate over the last 10 years, reflects the Board's commitment to delivering a reliable and growing income stream for shareholders over the long term. The 47-year record remains central to our proposition for shareholders and is supported by the combination of capital growth from the Portfolio and recurring cash flows from IPS.

¹ Based on the period 2015 to 2025.

It is the Board's current intention to recommend that the total dividend for 2026 maintains or increases the total 2025 dividend of 35.50 pence per ordinary share. Our shareholders will be asked to vote on the final dividend at our AGM in 2027.

Independent Professional Services

Corporate Trust

In our annual report published in March, we flagged that, following a strong period of cumulative revenue growth of 17.6% in 2023, 11.7% in 2024 and 9.3% in 2025, it would be reasonable for this business to return to something closer to its longer-term growth mean (i.e. mid to high single digits). Given the exceptional recent growth, the recorded revenue growth of 6.7% is more than satisfactory.

Primary market debt issuance levels in Europe were surprisingly good (+12% Year on Year: source Dealogic) despite the difficult geopolitical backdrop and we participated well.

Highlights for the period are: being appointed trustee on a Medium Term Note programme for Pearson, an issue of subordinated notes for Hampshire Trust Bank and on numerous Japanese convertible bonds for issuers including Hokkaido Electric Power Company, Inc and JX Advanced Metals Corporation. We were also appointed as Security Trustee by Amundi on their Bitcoin Exchange Traded Product, enabling their investors to obtain exposure to Bitcoin, while avoiding the operational aspects of directly holding these assets.

We acted as Escrow Agent to support an investment in Totalmobile by Five Arrows, the alternative assets arm of Rothschild & Co.

Overseas buyers helped to propel the value of M&A involving UK companies to the highest for the period since 2007 (Source: Financial Times). We have raised our profile and executed well in recent years across our law firm partners with respect to escrow services required to support these transactions and have plenty of room for further growth.

That said, for escrows we are not limited to M&A. We continue to grow our footprint for Real Estate transactions, Litigation, Ships, Aircraft, Sports & Cultural Events and genuinely bespoke situations where the combination of our deep domain expertise and ability to move fast is a differentiating factor for law firms and banks seeking timely, competitive solutions to complex problems.

As we always note, post-issue work, when a bond issuer runs into financial difficulty, can lead to counter-cyclical incremental revenues for this business. When bonds default, the workflow, risk and revenue profiles of our role can materially change. A key duty of the bond trustee is to be the legal creditor of the issuer on behalf of the bondholders. Our role in such default situations requires material incremental work that, given a favourable outcome, can lead to significant additional income for the firm. That said, defaults often take years to play out and the results are uncertain.

Given the sluggish UK economy and a steepening in yield curves, it is no surprise to see ONS insolvency data beginning to tick up, and some very high-profile defaults and restructurings hit the headlines. At the time of writing, Thames Water, WH Smith, and Costa Coffee are among the household names facing considerable challenges. Our post issue work increased modestly during the period, reflecting the escalating pressures being experienced in certain sectors of the economy. We are very focused on this and are exploring adding incremental resource and capability to our team. Our 137-year history as a Bond Trustee tells us there is a strong counter-cyclical nature to this work.

We do not wish ill on any of our clients, but, for the past five decades or so, credit lending cycles have typically been between 15 and 20 years long. The current cycle, which started after the Global Financial Crisis in 2008 has private credit central to its growth. Today, this market is estimated to be approximately $2 trillion in size. This time, rather than piling up directly on banks' balance sheets, insurance companies have moved in to increase returns on their investments. These insurance companies are increasingly using private credit ratings to evaluate these assets rather than the traditional public ratings (source: Li, Xuelin and Oh, Sangmin and Ricciardi, Giacomo, Rating Without Market Discipline).

A recent publication from The Bank for International Settlements notes that Private Credit Ratings appear to be higher on average than those offered by the traditional well-established Public Ratings firms. Noteworthy too, is that several insurance companies are now owned by Private Equity firms who originate plenty of loans in the Private Credit space. Regulators are easing rather than tightening capital requirements and are looking to increase availability of the asset class directly to retail investors. In the meantime, the other major investor (Private Credit Funds) in a sector dominated with illiquid assets are gating (i.e. not allowing redemption from) their funds. Over the last 6 months I have had scores of conversations with market participants who consistently tell me the same thing "my portfolio is just fine, but over there things are getting messy". The floor of the coal mine is piling up with dead canaries.

As I mentioned at the AGM, 100 years ago Ernest Hemingway published his classic "The Sun also Rises". One of the characters in the novel, Mike Campbell, is asked how he went bankrupt? He replied "Two ways. Slowly, then quickly". Our business is built on our deep domain expertise and ability to move fast. Our antennae are up and we are increasing our dialogue with our clients and partner networks.

Pensions

We are the longest-serving and one of the largest independent providers of pension trusteeship in the UK, with well over 200 appointments and assets under trusteeship of over £300 billion. The first half of 2026 has been an active period for the market as the Pension Schemes Act 2026 - which received Royal Assent in May - begins to be worked through, and schemes with strong funding positions move from strategic consideration toward action.

Market and Regulation

Many schemes that have spent the past few years assessing their end-game options are now moving toward decisions. Buy-in and buy-out activity has continued, in a competitive market, and with draft surplus flexibilities regulations out for consultation - closing September 2026 - trustee boards and corporate sponsors are increasingly engaged in structured conversations about run-on and surplus distribution. Some of our schemes have already accessed surplus under existing scheme rules, ahead of the new framework, and we expect this activity to grow as the regulations are finalised.

The first Own Risk Assessment deadlines began in March 2026 and, through the year thereafter schemes, will have to complete this process, generating governance support work across our client base. The Pensions Dashboard connection process has also brought data quality and administrator readiness into focus, with trustee boards scrutinising whether their administrators are prepared for the member-facing phase.

We have engaged actively with the DWP and TPR on the regulatory agenda - including contributing to consultations on trusteeship standards and surplus - through our secretariat role with the 100 Group Pensions Committee and our roles with the Association of Professional Pension Trustees ('APPT'). The debate around trustee independence and conflicts of interest is intensifying, and our structural independence from investment, actuarial, covenant, and endgame advisory services positions us well as governance standards evolve.

Highlights

The Pensions division delivered net revenues of £8.8m in H1 2026, modestly up on the prior year as normalisation continued following the outsized gains in 2023. Over the past five years, compound annual revenue growth has been 6.5%, underscoring the long-term strength of our market position.

In H1 2026, we continued to build momentum in both new client wins and the expansion of existing relationships.

Recent pensions wins include our appointments as professional trustee to Merck, Magnox (NRS), Jones Engineering, Columbia Threadneedle, A Bilborough and Avis.

In addition, we have secured a number of further new appointments across IGC, sole trustee, co-trustee and chair roles, which remain confidential at this stage but reflect continued demand for our independent trustee services across a broad range of schemes.

We have also seen strong client development activity, with notable expansions, including support to clients such as Whitbread Group plc, HarbisonWalker, ArvinMeritor, and the Canadian High Commission.

We have supported several clients through risk transfer transactions and moving to buy-out in H1 2026.

In addition, we continue to work on a number of other endgame transactions, including consideration of new solutions available in the market.

We have supported clients on a range of surplus-related activity in H1 2026. This includes early-stage discussions with a number of schemes, as well as agreeing interim surplus sharing arrangements. One example is where surplus will be used to support discretionary pension increases and company contributions for a small number of active defined benefit members. We will revisit this surplus sharing arrangement as the regulatory framework evolves.

Our Irish Pensions business celebrated its 5th anniversary and continued its expansion. Our Manchester Pensions team remains a leading presence in the North, and Jersey continues to generate new appointments. We welcomed 5 new colleagues into the team in H1 2026.

Outlook

The second half of 2026 will be shaped by the finalisation of the surplus regulations, the DWP's response to the governance and trusteeship consultation, and TPR's forthcoming governance paper. End-game activity is expected to increase as regulatory certainty improves, and we remain well placed through our independence, our depth of expertise, and our active engagement with the policy agenda to support clients through what continues to be a consequential period for the market.

Corporate Services

Our Corporate Services business reported net revenue growth of 7.3% in H1 2026.

Service of Process

This remains our business with the least earnings visibility and is most dependent on global macro-economic factors and activity in capital markets. Major economies, such as the UK and US, allow overseas businesses to sign legal documents subject to their laws, provided that they have either a registered address or appointed agent for service of process in the governing jurisdiction.

Our long history in this area informs us that the greater the amount of global economic activity and capital markets new issuance, the greater the demand for our product.

Year-on-year revenue growth was good and each week we are reminded of the genuinely global nature of this business. We do business for clients based on all continents, except Antarctica.

We continue to work hard at developing our law firm networks in particular, and in June had our first business development trip to Brazil in recent memory. Ranked by the IMF as the world's tenth largest economy, Brazilian law firms and corporates have long seen the value of our Service of Process offering. They are now more aware of our wider service offering as we look to broaden and deepen these mutually beneficial relationships. The highlight of the trip was arguably a meeting with long-valued client Vale, the world's largest producer of Iron Ore, at their head office in Rio de Janeiro.

The region is not new for the businesses of Law Debenture. A quick delve into the archive reminds us that we were heavily involved in financing of railways and other infrastructure projects throughout South America over 100 years ago, a lively example being the debentures issued by Anglo Argentine Tramways in 1908. All had gone well until the company's assets were sequestrated by the Peron Government in the 1950's before being brought to a satisfactory conclusion in the 1960's. (NB see earlier comments under Corporate Trust regarding how our workload and risk can change materially when bonds default!).

The highly diversified client base is the biggest strength of this business. We must work hard to retain and develop existing relationships and nurture new ones throughout the globe.

Corporate Secretarial Services ('CSS')

H1 2026 was another pleasing period for the business as it continues to build positive momentum.

Our journey since purchasing this business has been (as stated at the time) one where significant investment was required in order to build a more desirable and scalable offering. Five years on, we now have better trained staff, better processes, better technology, and better performance metrics. Unsurprisingly, these combine to produce improved client outcomes which should underpin future growth. At the 2025 year-end we noted that our record sales pipelines were beginning to feed through, and we have maintained this favourable trend during the first half.

The business is now growing both revenues and profits faster than the average for the IPS businesses based on an expanding client footprint. Perhaps even more encouragingly, we are seeing much more joined up product and business development successes between this and our other IPS businesses. This unlocks real value for our clients and in turn for our shareholders.

Closer to home, our UK Board support and advisory business continued to develop its nicely growing franchise with significant appointments that included JP Morgan, Velonetic and The Pension Protection Fund. These three names underscore neatly the diverse range of businesses to which we can add value at different stages.

Our emerging success here has been very hard-won. The size of the addressable market for our products and services (particularly Global Entity Management Services ('GEMS')) is simply enormous. We must be relentless in our focus on excellence in client delivery in order to build on our heartening progress.

Structured Finance

Another solid first half from our smallest business, which provides accounting and administrative services to special purpose vehicles ('SPVs'). Typical buyers of our services are asset managers, hedge funds and challenger banks. They use SPV structures to warehouse and provide long‑term funding for real assets. Examples include credit card receivables, mortgages, real estate and aircraft leases.

In our most recent Annual Report, we highlighted the work that we do supporting the traditional structures outlined above as well as innovative non-standard structures.

The first half of 2026 was more of the same with a series of new transactions for our existing stable of challenger banks and boutique asset managers. A couple of highlights included our role in a multi-billion pound recapitalization transaction for a FTSE 100 client, and our role as SPV administrator for Peabody Trust for a project that simplified their overall borrowing structure.

New deal enquiry was up year on year and we continue to invest in our business development and distribution efforts to support our future growth.

Safecall

Following an excellent first half of 2025, we are delighted to report revenue growth for the tenth successive year for this business.

As new legislation continues to be rolled out, our offering continues to widen. Most notably, in the UK, from 6 April 2026, sexual harassment in the workplace explicitly qualifies as a legally protected disclosure under the Employment Act 2025. We have worked closely with clients and law firms in order to bring the best of our combined experience to a series of well-attended webinars to help both clients and prospective clients address the complex but critical matters that need to be navigated in order to support this change.

Yet again, we provided a new record number of reports to our clients during the period.

We have rolled out significant improvements to our client portal and are now able to offer translations using artificial intelligence solutions for our digital reporting channels that now account for over 70% of our inputs. But we won't stop here. In fact, we are quickening the pace of investment in our infrastructure to support our client offerings in this space. We have added a new Product Manager, extra, dedicated full-time technology development headcount and incremental resource in both Strategic Relationship Management and Enterprise Sales.

We are delighted to be able to increasingly win work with larger clients and have started to make inroads with respect to competitive procurement processes in the public sector.

Highlights for the period include; continuing to grow our investigations business and being awarded a large public sector investigations tender for a two-year period, a doubling in training revenue, in part driven by the prevention of sexual harassment legislation and increased client focus to ensure employees understand their role and that managers are equipped to respond appropriately should reports be made to them.

We are a high-quality, client-centric, insightful provider in a sector littered with low-cost box ticker products and will continue to invest in and play to our strengths. We are frequently encouraged by the unsolicited positive feedback that we are given regarding the quality of the work that we do that really makes a difference to people's lives.

Central services, technology and our people

Four years ago, we set out to transform our operating model, moving on from infrastructure that had been siloed across service lines and underinvested in for some time. That work has fundamentally reshaped how the business runs day to day, and we now have solid, scalable foundations across our central services. We do not regard this as a project with an end date: the pace of change in our sector means the operating model has to be treated as an agile ecosystem, not a blueprint to tick off and file away.

AI has moved from something we were exploring conceptually to something we are now using in practice, with governance at the core of how we roll it out. When we look at a workflow today, we ask where AI can sensibly help, while remaining more cautious where it touches client-facing work directly - there we are working closely with clients and other stakeholders to move at the right pace for them, not just for us. AI-assisted minute-taking is now supporting our Corporate Secretarial and Pensions teams, helping our people spend less time on transcription and more on judgement and context. We have also extended automation across Pensions, Corporate Trust and our business development function, using a mix of tools including AI, and software development cycle times have improved: a recent platform development estimated at six weeks of human effort was delivered in days once we deployed an AI coding agent alongside the developer. As we scale, efficiencies like these could be material in a lean team. What matters most, though, is not the technology we choose but how our people work with it, and getting that combination right will determine whether we stay relevant and competitive.

Cyber security remains the area of greatest direct technology investment, given how quickly the threat landscape continues to evolve. We have maintained and re-certified Cyber Essentials Plus and continue to work closely with market-leading suppliers to keep our defences robust - this is not cheap, but is non-negotiable. ISO 27001 certification for LawDeb remains on track for Q1 2027, complementing Safecall's existing standalone certification.

Alongside this, we have continued to modernise our core operations and product estate. We have delivered the most substantial architectural change to the Safecall portal to date, reducing operating costs and improving client experience; our Director Identity Verification portal has had two major releases including a same-day service generating additional revenue; and CSS Vantage, our new bespoke entity management platform, completed development in Q1 and is now live for the first cohort of clients. We have continued to extend automation across processes from client onboarding through to billing, and to invest in experienced, skilled people across the technology function to support this agenda.

On our people more broadly, having reached a solid operational HR footing over the last few years, the function is now turning towards broader people enablement - systematically unlocking the value of our people in an increasingly diverse, complex and technology-enabled world. We have launched our Elevate emerging leaders programme, delivered training to clients under the LawDeb Governance Academy, and have a further programme beginning over the summer and into autumn, broadening our people's capabilities beyond technical excellence in their day job. As we said at last year end, building great teams is work measured in years and decades, not weeks and months.

The underlying pillars of our operating model - scaling without reliance on manual processes, using technology to our advantage, engaging the best people, applying controls proportionately, and using data to drive insight - remain as relevant as ever and increasingly interconnected with one another.

Outlook

Elevated levels of geopolitical and macroeconomic uncertainty are likely to persist through the second half of the year. In the UK, the political environment also remains unsettled with the transition to the seventh Prime Minister in ten years.

Despite the often-turbulent nature of global markets in the first half, they have also demonstrated a notable degree of resilience despite the challenging external environment. The unprecedented scale of investment into companies focused on technology and artificial intelligence has attracted significant attention, culminating in the largest ever public listing for SpaceX in June.

Amid all these external developments, and while Law Debenture is not immune to wider uncertainty, we are focused on delivering for shareholders. We are resilient by design and our confidence in the business model is reinforced by the combination of our diversified investment portfolio and IPS business which has served shareholders well through a range of market environments.

This gives our Investment Managers continued flexibility to invest where they see attractive long-term value while IPS provides dependable cash flow and exposure to attractive markets where demand remains strong, and where we continue to see significant opportunities for growth over the medium and long term.

Our focus is underpinned by continued investment in talent and technology to ensure we can continue to capture these opportunities and provide the excellent services we provide to clients, which include major blue-chip companies and highly respected financial institutions. These investments should enable us to gain further market share and increase our growing roster of clients.

I therefore remain confident in the strength of Law Debenture's model through the competitive advantages it offers, and we are committed to continue delivering for shareholders.

Denis Jackson

Chief Executive Officer

23 July 2026

Investment Managers' Report

Overview and market backdrop

The Portfolio performed well in the six months to the end of June, with the Trust's NAV (with debt at par) rising 11.4%, while the FTSE All-Share benchmark rose 7.2%. Two broad themes were responsible for the outperformance - growing power demand, predominantly for datacentres, as well as ongoing takeover activity within the Portfolio. We discuss both of these areas in the performance review section.

In a volatile six months, the focus of the UK equity market was predominantly concentrated on the impact of AI, and the Iranian conflict.

The impact of AI is complex. There is the first-order impact of the huge amounts of capital expenditure taking place, creating substantial demand for the equipment going into the datacentres as well as the need for additional power generation (which is requiring off-grid power sources given the scale and speed of deployment). There is then the second-order impact regarding the use of AI, and which businesses will see their future earnings potential positively or negatively impacted.

If we turn to the Portfolio, the first-order impact of AI led to a substantial re-rating of fuel cell developer Ceres Power, as their technology has the potential to solve a power problem for the datacentres, with the ability for fuel cells to be scaled and deployed faster than, for example, gas turbines. Infineon Technologies also performed well as a result of datacentre capital expenditure creating additional demand for their power semiconductors. The second-order impact was most clearly seen in the fierce debate around, and subsequent de‑rating of, much of the software and data services industries. This was as a result of concern that they will see their business model (for example their pricing power) severely impacted by use of AI. While the Portfolio had a relatively low weight in these areas at the start of the calendar year (which was for valuation reasons rather than a strong view on AI), we took the opportunity in February to establish new positions in two data services firms - LSEG and Relx (we go into more detail in the activity section).

While the duration of, and resolution to, the current conflict in Iran are unclear, what is clear is that the conflict has added a further (at least temporary) inflationary headwind into the UK economy at a time when inflation had otherwise largely been heading downwards. Prior to the conflict, UK interest rates had been expected to fall further this year. Following the conflict, interest rate expectations have been volatile, at times pricing in three to four interest rate increases - although this has since been moderated to around one interest rate increase later in the calendar year. For this Portfolio specifically, the change in interest rate expectations has meant that stocks that are particularly sensitive to interest rates (such as housebuilders, and those that serve the housebuilders such as building materials producers) have underperformed during the six months and have seen earnings recovery delayed. We have continued to hold, and in some cases have added to, positions in the area - for example purchasing a new holding in heavy building materials producer Breedon. While end‑markets in areas such as residential housebuilding continue to be depressed, we are often adding to or buying holdings on lower than historic valuations, with those low valuations calculated on depressed earnings levels. We cannot know when the earnings recovery will come, but we think this presents an interesting valuation opportunity within a diverse portfolio for the patient investor.

Activity

Takeover activity was the predominant source of Portfolio sales during the period, with Board-recommended takeover offers for insurer Beazley, aerospace engineer Senior, overseas consumer lender International Personal Finance, fund manager Schroders and ingredients producer Tate & Lyle (there were also rejected offers for Segro, IP Group and Easyjet). In aggregate, corporate activity led to Portfolio sales of over £70m, that were predominantly re-invested and we ended the first half in a roughly neutral position (with portfolio sales and purchases approximately matching). The ongoing heightened level of takeover activity in both this Portfolio and the broader UK equity market is, in our view, further evidence of the valuation opportunity currently available in UK equities. This is why we continue to hold a historically high weighting of 91% in UK equities.

The largest purchase during the six months was Relx, a provider of critical data and analytics for use by (for example) lawyers and insurance firms, as well as a producer of scientific journals such as The Lancet. The position was purchased in February following a sharp fall in the share price. This fall was not driven by a slowdown in reported sales or earnings growth - the company, at their full year results, reported encouraging revenue growth of 7% and earnings per share growth of 10%. Instead, the share price fall was driven by concerns of whether future earnings potential would be impacted by AI, for example by new entrants such as Harvey in the legal space. While it is impossible to say for certain, we think on balance Relx will prove comparatively well insulated, for the key reason that much of Relx's data is proprietary. Within legal, for example, LexisNexis has case law spanning decades, obtained from thousands of courts and with interpretative notes on top. We think LexisNexis will, therefore, continue to be one of the definitive data sources (with the clear need in this area to have comprehensive and accurate data). We purchased Relx at its lowest valuation level (as measured by 12-month forward price/earnings) in roughly a decade. In our investment process, we look for opportunities to buy market leading, well-managed companies trading at attractive valuations, and we saw this as one such opportunity.

Other material new positions purchased during the period included data, analytics and market infrastructure provider London Stock Exchange Group and medical equipment producer Convatec. In both cases, shares are trading at the low end of their historical valuation range, but we see their earnings growth prospects as undimmed.

Performance review

Top five gains over six months

During the six months, three of the top five best performers were driven by the need for additional power generation. Ceres Power, for example, benefitted from read across from a substantial order that US peer Bloom Energy received from Oracle for their solid oxide fuel cells in order to power datacentres. While we continue to see a potentially very large end‑market opportunity for these names, we took the opportunity during the period to take substantial profits in Ceres, Infineon and ITM. In the case of Ceres, we took profits of £11.7m during the period. This compares to the value of the holding at calendar year end of £13.5m, and at the end of June the remaining holding was worth £23.8m.

Elsewhere, strong performance was often driven by ongoing takeover activity, for example Senior agreed to a takeover by private equity firm Blackstone and also within the top ten contributors was Schroders, having agreed to a takeover offer by US peer Nuveen.

Top five losses over six months

The largest detractor, Flutter Entertainment, saw its share price fall as a result of concerns that prediction markets (in which Flutter themselves are investing) will bring a new source of competition that could, over time, erode their addressable markets. There were also some company-specific missteps in their US business, FanDuel, which culminated in management change in that division. During the six months, we added modestly to the holding, as in our view the sports betting opportunity in the US remains substantial, with Flutter among the leader players in the industry. Turning to other detractors - Boku (which is a mobile payment platform) and defence supplier Babcock both de-rated from their highs. This was not driven by any particular earnings disappointment, but rather by high expectations at the start of the year and the market questioning whether recent high levels of growth could be sustained. The remaining detractors - brick manufacturer Ibstock and retailer Dunelm - were impacted by a subdued UK housing market and consumer spending backdrop.

Portfolio income

Investment income received grew from £22.5m in H1 2025 to £25.4m in H1 2026. This growth was partially driven by net investment during 2025, where we were net investors of £53m over the course of the year, including in some higher dividend yield sectors such as commercial property.

Outlook

The past six months has been a reminder that the unexpected can, and often does, happen. We did not foresee a renewed conflict in the Middle East, creating an inflationary headwind and delaying interest rate cuts that we previously saw as likely this year. Nevertheless, the Portfolio and the broader UK equity market has continued to progress despite these unforeseen headwinds. This ultimately demonstrates the importance of valuation discipline and diversity.

The Portfolio continues to trade on an attractive valuation (13.5x 12-month historical earnings as at the end of June). As the chart below shows - starting valuations have historically correlated strongly with real long-run returns, with a lower starting valuation historically correlating with better long run inflation-adjusted returns.

Diversity within the Portfolio has also meant that, while interest-rate sensitive holdings have often underperformed, other areas within the Portfolio have more than compensated. We continue to be confident that a diverse collection of moderately valued, well-managed companies with good prospects for sales and earnings growth can provide an attractive total return for our shareholders.

As shared by Denis in the Half Yearly Management Report, after 44 years in financial services, James has decided to retire from Janus Henderson in June 2027. Going forward, the Portfolio will be managed by Laura, who has been Joint Portfolio Manager of Law Debenture since 2019 and has worked on the account since 2011. James said:  "Laura and I have worked closely together for 15 years, including seven years jointly managing the Law Debenture portfolio. I have no doubt that she will continue to be a huge asset to the Company and wish her all the best for the years ahead."

Laura Foll and James Henderson

Investment Managers

23 July 2026

Portfolio by Sector and Value

Sector distribution of portfolio by value

Geographical distribution of portfolio by value